On this date, the euro was established as a unified currency among the then members of the European Union (EU). Although not an EU member, Montenegro has been using the euro for over 20 years.

The euro now supports the economy and benefits 350 million people across 20 countries that are part of the eurozone, as highlighted by leading EU officials on the European Central Bank’s (ECB) website.

The blog post is authored by Eurogroup President Paskal Donaho (Paschal Donohoe), ECB President Kristine Lagarde, President of the European Parliament Roberta Metsola, President of the European Council Charles Michel, and President of the European Commission Ursula von der Leyen.

“Unique Europe has always been a response to challenges that individual states could not solve alone. After World War II, visionary European leaders understood that lasting peace on the continent could only be achieved through economic unification. They recognized that a single currency was essential to maximize the economic benefits of that peace,” they stated.

They recall that in the late 1980s, Europe made significant strides towards deepening the single market, paving the way for the dream of a singular currency to turn into a tangible project.

“Twenty-five years ago, on January 1, 1999, that dream became a reality. The euro is now an integral part of our daily lives, simplifying transactions and contributing to stability and sovereignty,” the European officials emphasized.

The euro is used by 20 countries in the eurozone: Austria, Belgium, Cyprus, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Croatia, Portugal, Slovakia, and Spain.

Countries that utilize the euro but are not eurozone members include Montenegro, Monaco, San Marino, Vatican City, Andorra, and Kosovo.

Montenegro Unilaterally Adopted the Euro in 2002

Montenegro adopted the euro unilaterally in 2002, just three years after it was introduced by EU members. Prior to that, from November 1999, Montenegro had been using the German mark alongside the dinar, and from January 2001 to January 2002, it was the sole currency, helping to shield the Montenegrin economy from hyperinflation that affected the former Federal Republic of Yugoslavia under Slobodan Milosevic.

The move to adopt the mark was approved by the German Bundesbank, allowing for conversion, while the introduction of the euro did not receive official consent from Brussels.

According to European regulations (convergence criteria), for a country to adopt the euro, it must be an EU member and meet key criteria: a public deficit of less than 3% of GDP and public debt not exceeding 60% of GDP.

In June 2018, Montenegro began negotiating Chapter 17 (Economic and Monetary Union), and five benchmarks were set that they need to meet. The final requirement states: “Montenegro has agreed with the EU to implement the framework for euro adoption.”

“Montenegro aligns with the objectives of the Economic and Monetary Union (EMU) and actively seeks to harmonize its fiscal and monetary policies with EU standards,” as stated on the government’s “EU.me” platform, which provides updates on the EU negotiations.

Montenegro’s current monetary system, which has utilized the euro since 2002 (“Eurisanje”), presents unique characteristics in the context of EU negotiations.

“As EU legislation does not specify additional criteria for membership regarding ‘eurization,’ agreements with the European Commission and ECB will determine how to assess compliance with the Maastricht criteria. Therefore, improving macroeconomic stability, public finance stability, and enhancing economic competitiveness are key tasks for EU accession,” government representatives stated.

Living with the Euro is Easier

In their blog on the ECB site, European officials emphasized that life in Europe with the euro is simplified, allowing residents to easily compare prices, trade, and travel.

“The euro contributes to stability by promoting growth and employment during times of crisis. As issuers of the second most important currency in the world, we enjoy greater sovereignty in uncertain times. It’s no wonder that the eurozone has expanded from 11 to 20 member states,” they noted.

They acknowledged that in recent years, significant challenges have arisen, even raising questions about the euro’s future.

“However, we have successfully tackled every challenge, responding to global financial crises, for instance, by establishing protective mechanisms such as a coordinated system for bank supervision and rehabilitation, and a European stabilization mechanism. Today, support for the single currency among euro area residents is nearly at record levels,” they stated.

European officials also underscored that their work is not yet complete, calling attention to challenges that individual states cannot address and the expectation among citizens for Europe to respond.

With increasing geopolitical tensions, including the ongoing war that Russia is waging against Ukraine, decisive common actions are required.

The climate crisis exacerbates these issues, as carbon emissions do not respect state borders. “Never before has our competitiveness been so threatened by energy and industrial policies from other parts of the world,” they noted.

“We thus have a shared interest in urgently addressing pressing issues such as defense, and both green and digital transitions. Similarly, financing significant investments required to decarbonize our economies, strengthen supply chains, and enhance technologies is critical. The green transition in the EU alone will necessitate investments of 620 billion euros per year by 2030.”

They emphasized that solutions must align with the scope required for cooperation at the European level.

“We must create a genuine Union of capital markets that encompasses the entire continent to mobilize private investment. We also need to enhance competitiveness and security through existing mechanisms, revising fiscal rules and bolstering banking union efforts. The introduction of a single currency in the digital era includes laying the groundwork for a potential digital euro to complement cash,” EU officials asserted.

Simultaneously, they acknowledged that some EU accession candidates should retain the ability to make determinations independently. Expansion and deepening of the EU are not mutually exclusive, though adjustments in EU structure may be necessitated by enlargement.

“Europeans recognize that the world is evolving. And they know the strength of unity. About two-thirds of Europeans view the EU as a stabilizing force. Let us demonstrate that Europe can manage change and meet their expectations. We must be ambitious and persistent, just as the founders of the European Union were. We must also accept that not all goals can be realized instantly. The experience of European integration teaches us the importance of recognizing the right moment to take action. That moment will come for every step we take.”

They recall the French saying: “For great achievements, it’s not enough to act; we must also dream. A plan is not enough; it requires faith.”

“In the initial 25 years of the euro, we have seen how successfully it could achieve what once was a dream. However, the world we inhabit is changing, and we aim to show that a unified Europe offers the answers that Europeans and the world seek,” concluded the EU officials.